Currency in AUD
Last close As at 25/03/2023
AUD0.04
▲ 0.01 (33.33%)
Market capitalisation
AUD26m
Research: Healthcare
Arovella has announced the launch of ZolpiMist (an oromucosal spray for short-term insomnia) by partner STADA in Australia and the cessation by partner Strides Pharma of its development programme ALA-001 (preclinical) for an oral spray formulation of the migraine drug sumatriptan. The drugs are two of Arovella’s five pipeline assets being developed under its legacy OroMist platform, with ZolpiMist its most advanced asset. The termination of the ALA-001 programme will not have any immediate financial implications for Arovella as development was funded by Strides), although it raises uncertainty about future milestone and royalty payments. The commercial launch of ZolpiMist in Australia is the first globally and is a positive for the company. Our valuation does not include a contribution from ALA-001 and is unchanged at A$30.5m or A$0.05/share. We highlight that this also excludes Arovella’s early-stage cell therapy platform/pipeline and note the potential upside on clinical progression.
Arovella Therapeutics |
OroMist pipeline development update |
Pipeline update |
Pharma and biotech |
30 June 2022 |
Share price performance Business description
Analysts
Arovella Therapeutics is a research client of Edison Investment Research Limited |
Arovella has announced the launch of ZolpiMist (an oromucosal spray for short-term insomnia) by partner STADA in Australia and the cessation by partner Strides Pharma of its development programme ALA-001 (preclinical) for an oral spray formulation of the migraine drug sumatriptan. The drugs are two of Arovella’s five pipeline assets being developed under its legacy OroMist platform, with ZolpiMist its most advanced asset. The termination of the ALA-001 programme will not have any immediate financial implications for Arovella as development was funded by Strides), although it raises uncertainty about future milestone and royalty payments. The commercial launch of ZolpiMist in Australia is the first globally and is a positive for the company. Our valuation does not include a contribution from ALA-001 and is unchanged at A$30.5m or A$0.05/share. We highlight that this also excludes Arovella’s early-stage cell therapy platform/pipeline and note the potential upside on clinical progression.
Year end |
Revenue (A$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/20 |
0.5 |
(3.6) |
(0.03) |
0.0 |
N/A |
N/A |
06/21 |
0.3 |
(3.4) |
(0.01) |
0.0 |
N/A |
N/A |
06/22e |
0.4 |
(7.5) |
(0.01) |
0.0 |
N/A |
N/A |
06/23e |
2.4 |
(5.8) |
(0.01) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
In a positive development, Arovella announced on 22 June that ZolpiMist, its most clinically advanced asset, has been launched in Australia earlier than anticipated (previously expected in Q322) by licensing and distribution partner STADA Australia. This marks the first global launch of ZolpiMist, although we note that the drug has also received regulatory approval in Chile (out-licensed to Teva in Mexico, Brazil and Chile). STADA holds the option to expand distribution into New Zealand. Arovella is incorporating a child-resistant lock on its ZolpiMist dispensers and approval by the Australian regulators will trigger a A$40,000 milestone payment and a 10% royalty on sales (in addition to the supply price).
For ALA-001, Strides has cited a change in market dynamics as the primary reason for its decision to cease development. Arovella has communicated that it is restructuring the formulation group to match the reformulation projects, although it is unclear whether it will continue development with another partner. As a reminder, the development and licensing agreement was signed in November 2018 for developing and commercialising ALA-001 for the US market. The development was being funded by Strides, with Arovella providing the formulation, in exchange for an upfront payment of US$0.4m (A$0.56m), combined milestone payments of US$0.6m (A$0.83m) and royalty payments on commercial sales. As the drug is still in the pre-clinical stage, Arovella expects no implication on cost or immediate revenue inflows, although we anticipate that future income potential and/or timelines may likely be affected if the company chooses to continue development with a different partner.
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Research: Investment Companies
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